The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit on sugar cess paid on import of raw sugar and noted that Section 11D of the Central Excise Tariff Act, 1985 (CETA), can be invoked only if excise duty is collected.
M/s. Shree Renuka Sugar Limited, (“Noticee”) was industrial unit engaged in manufacture of excisable goods, viz., Sugar falling under Chapter No. 17 of the Central Excise Tariff Act, 1985, availing the Cenvat credit of duty paid on inputs, capital goods and input services under Cenvat Credit Rules, 2004, and holding Central Excise Registration under rule 9 of the Central Excise Rules, 2002.
The Noticee-appellant was working under self-assessment procedure as per Central Excise Rules, 2002, as amended and accordingly assessing the assessable value of the final product and determining the Central Excise Duty thereon as reflected in ER-1 monthly Returns. The Noticee availing the facility of payment of Central Excise Duty on monthly instalments basis as per Rule 8 of CER, 2002 as amended.
During the course of, scrutiny of records of the Noticee, it was observed that the Noticee had availed Cenvat credit of the sugar cess, Education Cess and Secondary & Higher Education Cess (on Sugar cess), which has been paid by them at the time of import and utilized the said credit for the purpose of payment of sugar Cess, Education Cess and Secondary & Higher Education Cess on domestic sale of refined sugar.
The Advocate for the appellant submitted that this issue is no longer res-Integra as this issue has been considered and decided in favour of the assessee including in their own case of the appellant themselves.
R.K Agarwal, the Superintendent (AR) who appeared on behalf of the revenue reiterates the finding of the impugned order. He placed reliance on the decision of the Guajrat High Court in the case of commissioner Vs. Sahakari Khand Udyog limited.
A Two-Member Bench comprising of Raju, Technical Member and Somesh Arora, Judicial Member observed that “In view of the forgoing and also the fact that Section 11D can be invoked only if duty is collected, but not paid, whereas in the instant case, same was paid from accumulated CENVAT Credit, we find the case of department has no legs to stand. Further, when levy i.e. Sugar Cess in this case has not been done away with, but has only been exempted vide Notification No. S.O. 102 (E), dated, 07.01.2009 by Ministry of Consumer Affairs, party always has the right to avail or not to avail exemption, as per the trite law relied upon by appellants.”
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